Edinburgh 0131 610 0056   •    Glasgow 0141 432 0056  •    info@cavettaconsulting.com    •          

Common Questions

 

Get tax owed back to you. Get our Newsletter

Get tax owed back to you.

Get our Newsletter!

Is this one of those PPI type schemes?

No. Claiming capital allowances is nothing like this whatsoever. Capital Allowances have been claimable, since the Wear and Tear Act was introduced in 1878. Indeed, claiming capital allowances is a statutory right as set out in the Capital Allowances Act 2001. This Act sets out very clear rules for the claiming of this tax relief.

Will I automatically get a cheque back from HMRC?

The submission of a capital allowances claim will not automatically generate a repayment from HMRC. This will depend on the individual circumstances of the taxpayer. In most circumstances, the taxpayer will use the allowance to reduce their tax liability.

Will this affect my relationship with my Accountant?

A lot of accountants recognise that they neither have the time or the expertise to offer this specialist advice. Indeed, many capital allowance specialists are referred work directly from accountants. Your accountant will certainly want to do everything in their remit to help you lower your tax liability, and would fully expect to seek expert advice from time to time.

Will claiming capital allowances mean that the taxman will be looking more closely at me in the future?

No. Whilst HMRC will examine the capital allowances claims as they would with any other aspect of the tax return, they will not target an individual for the reason that the taxpayer has claimed capital allowances. Claiming capital allowances is a statutory right and every taxpayer has a right to legally mitigate their tax liability.

Will this take a long time?

The length of time to prepare the claim will depend on the information we have. The preparation time does depend on the scale and complexity of the project, and the quality of information available. Where the information available is of good quality and there are no complexities, the whole process can take from one week to one month, depending on the size. Agreement of the claim with HMRC is subject to the usual statutory timelines.

Will I need to provide lots of information?

The level of information will depend on the type of claim. The more information that you can provide up front will of course help to substantiate your claim. That said, typically what we need is your authority to obtain information from your advising solicitors, surveyors and valuers. It is also useful for you to make any tenant’s aware, that we will visit the premises for the purpose of carrying out a capital allowances survey.

I am making losses why should I claim?

Capital Allowances can in some instances increase the amount of “tax losses” that can be utilised against current and future income. In addition, in some instances tax credits can be claimed for amounts generated through the Enhanced Capital Allowances or Land Remediation Relief.

Regardless of whether you can use the allowances, it is important to remember that since 2012, when the new rules on claiming second hand fixtures in property came into force, it is necessary that this expenditure is included in the general and special rate pools. If it is not recorded, this will make the sale process significantly problematic.

Will this cost an arm and a leg?

The view of Cavetta Consulting, is that we should be a value adding service. Before undertaking a commission, we will discuss the fee with you, and consider your individual circumstances before proposing a fee.

Our fees are fixed, banded or based on a proportion of the first-year tax saving. We do not advocate charging amounts equal to or above the first-year tax saving and do not charge fees based on the your year on year tax service. We charge our fee once the schedule has been completed and the remainder once it is agreed with HMRC.

Ok, what is the claim process

Each claim is different depending on the property, the circumstances of the claim and whether the claim relates to acquisition or development expenditure. The general stages are as follows:

  • Establish whether the client is entitled to make a claim
  • Establish exactly what capital expenditure the client has incurred or is planning to incur
  • Claim preparation
  • Agreement with HMRC

Once appointed we can discuss this with you in more detail.

I have never claimed before. Does this mean I have lost the chance to claim allowances on my other properties?

No, you will still be able to claim some form of relief. If the expenditure has been incurred more than 2 years since the year-end then Land Remediation Relief may possibly be lost, unless the return is still open.

However, it will still be possible to claim capital allowances retrospectively provided that you still have the relevant interest in the property, have incurred capital expenditure on it and actively use it as a business asset. Indeed, with the new fixture rules it is advantageous to firm the capital allowances position up before going to market.

I own a foreign controlled company. Can I still claim capital allowances for my property?

Yes. Foreign companies can claim a deduction from their UK rental income for properties that are owned in the UK.

I automatically get a cheque back from HMRC?

The submission of a capital allowances claim will not automatically generate a repayment from HMRC. This will depend on the individual circumstances of the taxpayer. In most circumstances, the taxpayer will use the allowance to reduce their tax liability.

Will claiming capital allowances affect my capital gains computation?

No. The two are mutually exclusive with the exception that capital gains tax losses generated will be restricted by the amount of capital allowances claimed for the property

Edinburgh Office

The Edinburgh Office
64a Cumberland St
Edinburgh
EH3 6RE

Phone: 0131 610 0056
Mobile: 07909 962279

 

Glasgow Office

dsvwv

Glasgow Office

Collabor8te
22 Montrose Street
Glasgow
G1 1RE

Phone: 0141 432 0056
Mobile: 0770 333 4317

 

Get in touch

Share This